Date archives "November 2009"

A team often slaves away for months, even years at a time, to get a product/service ready to launch into the market. Yet, it continues to surprise me how little effort is put into launching a product/service correctly, as compared to the effort put into producing it. Outlined below are a few critical steps that I follow closely when launching a new product/service.

1. Have one person or multiple people, in-charge of the product launch depending on the size of the launch. It is critical that one person takes full responsibility for the overall launch.

2. Building buzz and hype around your product/service before launching it, is a great way to get early traction. Tweet about the product features, blog about problems you want to solve, get individuals to test your product, pre-launch and provide testimonials, or their thoughts. Ideally, you should get someone really popular, or well known in your niche, to test drive the product/service, and hopefully convert them into a word of mouth ambassador. You could also use the gmail or google wave limited invite system.

3. Be careful not to over hype your product or infer functionalities that it may not have in the first iteration. Be clear about the problem area your product/service is going to solve, as well as some key features of the system. This is essential because regardless of how much hype you create, if your system does not live up to expectations, gathering traction is going to be very difficult.

4. Record everything meticulously. Depending on what sort of product you are launching, attach metrics to each process. If you run a web service, track how your customers are coming to the website, how long average registration takes, where they are navigating on your website, etc. Track google alerts, twitter and other social media tools to see if anyone is talking about your service. All of this information is vital for tweaks and upgrades.

5. Anticipate possible problems. Identify bottle necks, and put precautionary measures into place to enable you to handle them efficiently. Test the system using a worse case scenario, and test your standard operating procedures to handle such scenarios. Being well prepared helps you avoid the many surprises that tend to creep up during launch time.

6. Get users to provide feedback to you as simply as you possibly can. This could be feedback buttons from sites like Getsatisfaction, or it could be online support through chat windows on the website. If possible, fill out a short survey on your website. Incentivize the survey through a prize, a life long free account or something that is of value to your users.

First impressions are very important. The product/service does not have to be the best in it’s class at launch. However, it has to fulfill the client’s basic requirements, and their experience of using the product/service, should be as seamless as possible.

If you have any additional steps or insights to add on product/service launches I would really like to hear them.

1. Fred Wilson has been a venture capitalist since 1987. He currently is a managing partner at Union Square Ventures and also founded Flatiron Partners. Fred has a Bachelors degree in Mechanical Engineering from MIT and an MBA from The Wharton School of Business at the University of Pennsylvania.

2. Brad Feld has been an early stage investor and entrepreneur for over twenty years. Prior to co-founding Foundry Group, he co-founded Mobius Venture Capital and, prior to that, founded Intensity Ventures, a company that helped launch and operate software companies and later became a venture affiliate of the predecessor to Mobius Venture Capital.

3. Peter Rip brings over 25 years of experience as a successful entrepreneur, venture investor, and institutional investor. He has focused exclusively on early stage technology companies.

4. Mark Suster joined GRP Partners in 2007 after having worked with GRP for nearly 8 years as a two-time entrepreneur. Most recently Mark was Vice President, Product Management at Salesforce.com (NASDAQ: CRM) following its acquisition of Koral,where Mark was Founder and CEO.

5. Paul Graham is an essayist, programmer, and programming language designer. He’s currently working on a new programming language called Arc, a new book on startups, and is one of the partners in Y Combinator.

6. Jeff Clavier is based in Palo Alto, California, Jean-Francois “Jeff” Clavier is the Founder and Managing Partner of SoftTech VC, one of the most active seed stage investors in Web 2.0 startups.

9. Ed Sim is a founding member and Managing Director of Dawntreader Ventureswhich was established in 1998. With $250mm under management, Dawntreader Ventures is an early stage venture capital firm collaborating with entrepreneurs to build the next generation of software, Internet, and digital media companies.

10. Venturehacks is run by Nivi (bio) and Naval (bio). We’ve founded companies like Epinions; invested $20M in companies like Twitter; helped start companies backed by Sequoia, Benchmark, Kleiner Perkins, and Atlas; and advised many others.

Are you following any other VC blogs that you would recommend to be added to this list? I hope to get your comments and feedback.

No one wants to fail. In fact, people go to painful lengths to ensure that every step they take is the right one. However, the world has a different plan for all of us! No matter how many spreadsheets and hypotheses we construct, the probability to cover all angles in a complex decision, like starting a business is not always possible. There will inevitably be some factors that we are unable to completely account for. It is these uncontrollable factors that drive many people up the wall. I remember being that way in my earlier ventures. Before making any major decision I would spend months thinking about the ‘correct’ way to launch something.

This process had various levels of success in an era when the world did not have the capability to change so radically the very next day. With the present rapid technological advancement we have entered an information age where everything is connected. Reactions to a product launch can be recorded within hours, or days of the launch. We now live in an era where we do not have the luxury to sit around waiting to get lucky by finding the ‘right’ approach. To succeed in the marketplace today, we have to release our product/service to prospects as quickly and as cheaply as possible.

The longer we sit around waiting and debating, the more likely it is that someone else will end up doing what you wanted to do. By no means am I completely disregarding the analysis stage of business formation. That is a critical component in the overall success of the business. However, in a world where you have the ability to elicit instant feedback from your target market, the focus should be on getting whatever you want to build in front of them as soon as possible.

If you have developed a plan, have the means to develop or build it, make the decision today to just, do it!

I was having a talk with one of the companies I work with, Hatch Media. We were talking about ways to improve cash flows, since this industry is pretty notorious for clients not paying on time. However, here, there was a consistent trend of the business paying it’s vendors on or before due dates. This is a classic error which ends up costing small businesses in a big way. The fact of the matter is, one should not be in business to ensure that the vendors whom the business uses, get paid on time. With slow inflow cash cycles, one needs to leverage vendor relationships, and negotiate terms where the firm does not cripple itself in the short term.

Examine your business outflows, and if possible, set goals to extend payment cycles to match your inflow cycles. Standard business expenses such as rent, are some key items you should do your best to negotiate better terms for. Sure the landlord will not be very happy with your proposal and may strongly refuse to negotiate. However, from his/her side, it is far more expensive to get a new tenant. Hence, use that as a bargaining chip to extend your rent deadlines, or even try to defer payment for a couple of months and pay a lump sum in the next quarter. The same methodology can be used for fixed raw material or supplies that need to be purchased to produce your product.

Do whatever you can to improve your short term cash cycles, thereby allowing for more breathing room to expand and grow your business. A business which is constantly strapped for cash and living from one pay cheque to the next, will not have the ability to innovate and look further than a quarter in advance. Get control of your business cash flows, and make sure you use whatever bargaining chips you can to get yourself in a better cash flow position.

Speaking one’s mind is something a lot of us do our best to avoid in many situations. In some situations it is not the ‘correct’ thing to say, and in others we fear the other person may react adversely so we choose the safer path. The problem with the safer path is that it is a temporary illusion. A mirage of sorts, which leads us to believe that we can keep some things bottled up inside and they will not manifest themselves in some other form in the future. This is where a host of problems stem from, and then snowball into much more complicated issues. I have spoken about the importance of candor in your organization in the past. I think this concept has great implications outside your organization as well. Speaking one’s mind in many of the situations we face daily will not just help us sleep better at night, it will drastically reduce the stress and frustration factor in our lives.

Undoubtedly easier said that done! No one wants to be the one who says things without realizing or taking implications into account. However, I think a balance needs to be struck here. I do believe that often out of respect, as also due to some social graces and norms, we should not be saying everything that comes to our mind. There are however many exceptions to this rule! Particularly in relationships, be they business or personal, where not speaking your mind has the potential to create further complications down the road. It could be a situation where the other person is just not correctly understanding your point of view or position, and you continue to keep quiet just to keep the status quo. These are two very common scenarios that tend to lead to many sticky situations.

The rule of thumb should be, when you feel and think that speaking your mind can potentially benefit the relationship in the long term but with short term repercussions, you should go for it. How will you know when the time is appropriate ? You won’t….this comes with experience, and understanding such situations better. So if something is eating you up inside, there is no better time than now to do your best to resolve the issue.

We can, and often do question the outcome of many things. We also attempt to rationalize why certain things happen, and why certain things do not. In the moment, there is often a sense of urgency and challenge to make sense of why our life takes certain twists. However, when you start to look back on some major events that have taken place in your life, I do think they begin to make a lot more sense. I sincerely believe that all these events happen for an underlying reason, one we may not comprehend in the moment. There is however often a really good reason why they take place. Many a time we attempt to force certain outcomes, and when things do not go as we had planned, it upsets us. I know I have felt this way many a time. When I now look back at some of those times, it is with a sense of relief, and I feel glad that certain things which I regretted in the moment, did actually happen the way they did.

I think we need to start breaking free from the moulds that all of us are ‘supposed’ to follow. We need to embrace life for what it has to offer in the moment…. now! We need to start finding and focusing on the silver lining, rather than complaining about the storm clouds overhead. Life is too short for us to complain about why things did not turn out as planned. Sometimes, we need to take those risks, not fuss about the details too much, and really start living !

I recently moved houses. It was a most hectic and stressful week! Those of you who have moved houses several times, will be able to relate to the pains associated with relocating. One goes through a roller coaster of emotions from the dread of packing up , to the exhaustion during the actual moving process, and lastly, to a deep sense of relief once everything has been successfully completed. What really surprises me every time I have moved is how much stuff we collect over the years without realizing. In a way, moving helps you to press the restart button and start afresh.

Life works in a very similar manner. We have a tendency to hold onto our failures, disappointments and fears, longer than we should. Over time, these begin to weigh us down and in this process, also slow us down. We tend to take fewer risks, prefer to play it safe and stay well within our comfort zones. Moving out of a comfort zone is often too difficult. Such emotions, similar to those I experienced before actually moving, tend to dissuade us from doing anything new and what appears drastic.

Which is why they say, the day we stop growing is the day we stop living! Making changes in life on a recurring basis is a healthy part of ensuring that we continue to live life, rather than drift through it. Each one of us has the potential of achieving greatness in whatever we want to do. The difference between those who do and those who do not, is, that one of them makes the effort, the other does not!

Each and everyone of us has an inner voice. It speaks to us regularly! Over time, we learn to suppress it when it tells us things we do not want to hear. At an early age I knew I wanted to get into business. Coming from a family where most everyone else has chosen the corporate ladder, there was understandably a lot of reservation over the path I wanted to follow. However, when the time came, and I passed up job offers after I graduated from college, I felt keenly that I had made the right decision. Looking back on my experience since I graduated some years ago, I do truly feel that I could not be any happier with what I have achieved and accomplished since then. Everyday poses a new challenge, and provides me the motivation to jump out of bed and get to work.

Your inner voice may tell you that climbing the corporate ladder is what you want to do, or maybe you feel the urge to bring about positive change in this world, and social entrepreneurship is what you see yourself doing. Either or any way, I think we need to learn to trust our inner voice and heed and follow the path it prompts us to. It may admittedly sometimes sound absolutely crazy, or may even scare you. The fact of the matter is, it is usually always right! Like they say….. we miss 100% of the shots we never take.

It is true that in many cases our circumstances may not readily and immediately allow us to act upon what we really want to do. That should not however be an impediment for not taking a couple of steps forward in the desired direction to start achieving what you really want to do. We only live once….it is best to make the best of it by following our heart and instincts, and do what we truly want to do.

I have been pretty active on answers.onstarups.com. If you have not visited this website, it is basically a forum to ask questions related to entrepreneurship, in return, you get some really high quality answers from some very successful entrepreneurs. A question that keeps coming up time and time again, is the one about raising capital for web based businesses. In most cases, the individuals asking the questions have not finished building the product, have not got feedback from the community or any user base traction, and do not really have a clear plan about where they will use the money. In most cases, they all get the same advice, that is, they should come back and ask this question when they have a finished product & some revenue.

If I were to put it into simple steps it would be like:

1. Write a business plan on where you want to take the business in the next 3 – 5 years. This will help to test your idea and also gauge how you can grow, and the sort of monetization route you plan to take. At this point, I would recommend going out to get feedback from potential customers, to determine if there is any potential interest in the product/service you

2. Get a couple of co-founders to help you realize your plans. No matter how skilled you are, entrepreneurship is a tough business, and without support, you are far more likely to throw in the towel earlier, rather than later. This also gives you the opportunity to get co-founders to help in areas you are not so strong in.

3. Start building your product. Keep it simple and do your best to avoid feature creep. The key here is to get your product to market as quickly as possible. Usability and design are secondary at this juncture, the more urgent concern should be whether users actually want to use the product/service.

4. Launch your product and start building a user base to generate revenue as soon as you can. Freemium plays require a lot more time and capital upfront to gain traction. Investors want to see activity and revenue generation capabilities. There will always be companies such as Twitter, who do not follow this methodology. However, if this is your first startup, I would recommend generating revenue as quickly as possible.

The time to start raising Capital is only after completing step 4, when you see activity in your product/service and need capital to take it to the next level. Chances of getting funded before step 4 decrease dramatically, and you will get lost in the crowd in today’s age where just about anyone with web development knowledge can release a product.

My last bit of advice is, do not focus on just raising money from the onset. Rather, put all your energy into building the best product/service you can. This will have a far better chance of future payoff.

The last couple of days have been pretty hectic. There have been a series of highs and lows, enough to play havoc with most people’s minds. I guess this is part of entrepreneurship that gets lost in translation when people romantically recount their entrepreneurial experiences. I wrote about emotional control a year or so ago, as I was reading over the post, I realized anew how much it had to do with keeping one’s emotional stability while dealing with difficult individuals. This post takes up where I left off when I said ” The moment we let our emotions slip, we make decisions that could potentially be disastrous for future business.”

To be in control of our emotions when in danger of slipping up, is easier said than done ! Many a time during this journey of mine, there have been things that just did not work out as planned. Times when I realized half way through, that the path I was travelling upon was taking me in the wrong direction. I remember those times quite vividly! I remember experiencing periods of anger and frustration, periods that have the potential to either let you start afresh hoping for a better result, or, letting you just sit down with your head in your hands and throwing in the towel. I am sure most entrepreneurs reading this are able to relate to the emotions one experiences at such junctures.

The key to dealing effectively with such situations, is to be able to learn from your mistakes, and identify what you did right, and wrong. It is at times like these, that a lack of experience can lead to a black out. Stress and anxiety are powerful triggers, they have the ability to incapacitate us at such times. This is all part of the entrepreneurship learning curve! Over time, you develop the skills and emotional control to remain calm, and rationalize such events. If you are experiencing turbulent times in your business presently, I strongly advise you get yourself a mentor or a more experienced entrepreneur to guide you along the way. This will drastically reduce the number of mistakes you will make, and help you get back on your feet faster.

I will end this post with one of my favorite quotes from Oscar Wilde.

“A man who is master of himself can end a sorrow as easily as he can invent a pleasure. I don’t want to be at the mercy of my emotions. I want to use them, to enjoy them, and to dominate them.”